Downloading your favorite tune could soon cost 99 cents, plus tax.

Gov. Jim Doyle has proposed a 5 percent sales tax in his 2005-'07 budget for Internet downloads, including music, art, video and books. The tax is estimated to bring in about $1.9 million, according to Jessica Iverson, communications officer for the Wisconsin Department of Revenue.

"It's just a matter of tax equity between main street businesses and online businesses," Iverson said.

Currently people are paying sales taxes for items they buy in regular "Main Street" stores, but not for online purchases.

"So we're really putting our main street businesses, the ones that employ Wisconsin residents … at an economic disadvantage, at a comparative disadvantage," Iverson said.

South Dakota already has a tax on Internet downloads, and several other states have similar laws for digital goods, according to Iverson.

The tax would actually be an extension of an already existing requirement for Wisconsin residents, according to Mark Nebergall, president of the Internet Tax Fairness Coalition.

Under existing law, residents are required to assess the sales taxes of all purchases they make out of state or order from a company and pay the compensating use tax, Nebergall said.

"It's a virtually unenforceable tax," Nebergall said.

Residents do not need to pay sales taxes they paid in other states, Iverson said.

"I think basically it's just a matter of awareness," Iverson said. "There is a fairly low compliance rate."

New Mexico, Oregon, Montana, Alaska and Delaware do not have any sales taxes, Nebergall said, meaning the Internet sales tax would not apply in these states.

"For the 45 other states, they've all got a use tax, for people who shop online or buy out of state or have something shipped up to them," Nebergall said. "What the governor is proposing is apparently some enhancement to the law."

Since such a user tax already exists, Nebergall said he thought the proposal was probably unnecessary now.

State Rep. Scott Jensen (R-Waukesha) said in a press release last week that he opposes the governor's proposal.

"At the same time Gov. Doyle is trying to brand Wisconsin a high-tech haven, he is working overtime to impose high taxes on electronic commerce," Jensen said in the release. "As the budget process moves forward, I will be working to press the delete button on Gov. Doyle's 'i-Pod tax.'"

Last week the state legislature's Joint Finance Committee met in Watertown for the first of five public hearings on the 2005-'07 budget proposal. The committee is looking to change some of the budget before it is passed.

"The current proposal will need a healthy dose of reality before it is even ready for construction," said Rep. Dean Kaufert (R-Neenah), co-chair of the committee, before the hearing.

This may or may not include changing Doyle's Internet proposal. A spokesman for Kaufert said he has not closed the door on the Internet sales tax, but he wants to know why the governor has proposed it.

The fourth public hearing will be held today in Merrill, and the last will be held in Madison Thursday.

This article appeared in The Marquette Tribune on Mar. 15 2005.